Reducing Fraud, What Works And What Doesn't.

[brandblast]

Hi Everyone,

I have recently signed up two clients, both which started spamming within 2 weeks of signup, causing their accounts to be deleted, but also costing me time and money.

I attributed these two bad accounts to the fact that they were given free 30 day trials, I have modified my offer to a 30 day money back guarantee hoping this method might still offer good customers an incentive, while possibly deterring unwanted users.

MY QUESTION TO YOU IS: How has fraud affected your reseller business and what have you done to correct it?

I'm sure all of us have been affected in some way, let's put our collective experience together to learn how to detect and avoid these unwated users.

[jmbeach]

You did the right thing by changing your free 30 days to a refund before 30 days if not satisfied. Always get payment up front, that way you at least know they people are serious enough to give their credit card info - hopefully it's their credit card of course

I haven't had any fraud issues yet, thank goodness. Only late payers, in which case I give a short grace period. As far as spamming issues, you cannot really control that completely, unless if you feel you can vouch for your end users. Just be vigilant, and have a one-strike policy, and you should be okay.

[Vixen]

To be honest with you, the best thing we ever did was to start verifying every order via phone and/or fax. We contact every new account within the US via telephone and make sure their credit card information is a match with their credit card company. International customers must fax copies of their credit card, ID and signature. This has dramatically cut down on fraudulent sign ups and makes disputing charge backs from the few dishonest folks that sign up alot easier.

[soky]

I recently read a wonderful article... we use a number of methods and most are spelled out in the linked article...

Small E-Stores Avoid Credit Card Fraud
By Adam Stone
December 23, 2003

Credit card fraud literally killed Raymond Attipa's online business.

As the proprietor of topautoparts.com he saw fraudulent charges run as high as $35,000 in a single year, about 25 percent of the site's total income. "I found fixes, but there definitely was not one solution to fix it," said Attipa, who shut down the site about half a year ago.

Experts say it does not have to be that way. While the use of fraudulent credit cards is rampant online, it still is possible for the small e-business owner to put in place meaningful safeguards. To do so requires a careful mix of human and mechanical safeguards.

more>>>

http://www.smallbusinesscomputing.co...nt.php/3291231

[brandblast]

These are all great tips, I'll look at adopting some of your methods. It's great to see that clients are still signing up even the 30 day free trial is not being offered, sales have actually increased which was contrary to my expectations.

Thanks for all your help,

[mresell]

Some people look at "free" or "gimmicks" very suspiciously. You can always credit people after they have proved to be a "good" customer. Depends on what kind of customer you want. What is most important I believe is do you look and act credible and professional. Hosting is actually fairly cheap "in terms of cost" so someone looking for "real cheap" can be a bad idea. Vortech doesn't offer that to reseller's which they state up front...certainly didn't make me blink.Tho b2b is different (dealing w/ resellers instead of end users).